Millions already spent on Halifax Health legal fight

Saturday

Aug 24, 2013 at 6:14 PMAug 24, 2013 at 11:15 PM

By Skyler Swisherskyler.swisher@news-jrnl.com

DAYTONA BEACH — During his celebrity-studded 30-plus-year law career, L. Lin Wood has represented presidential contender Herman Cain, “Dr. Phil” McGraw, the family of slain child beauty contestant JonBenet Ramsey, and Richard Jewell, who was falsely suspected of the bombing at the summer Olympics in Atlanta. His latest case: A massive whistle-blower lawsuit against Halifax Health over physician contracts and billing practices that could prove to be the largest of its kind ever. Wood is ready to fight. Potentially, hundreds of millions of dollars are on the line, and if it goes to trial, he'll be making the case of Elin Baklid-Kunz, a Halifax Health employee who filed suit against the hospital after she noticed what she considered to be irregularities. “Every lawsuit is a war,” Wood said. “Every deposition and hearing along the way are individual battles in the war. You've got to have a strategy, and you've got to execute that strategy in a way that's within the rules but is aggressive.” Halifax Health has come out swinging, too, calling the suit a baseless attack on the community's public, safety-net hospital. Records show the public hospital has poured $15 million into the legal fight since the suit was filed in 2009, an amount that will only continue to grow as the hospital marches toward a March trial date. Halifax Health produced fliers, which were distributed to hospital employees and posted on the hospital's website, detailing its position. The 678-bed hospital system would rather not spend money on expensive lawyers at all, said John Guthrie, a Halifax Health spokesman. “That's $15 million that is not being used for health care in the community, and under the current expense and budgeting challenges, that's a large amount of money,” he said. “We didn't have a choice. We were put into this situation. We have no choice but to defend ourselves.” The case centers around allegations that Halifax Health maintained illicit contracts from 2005 until 2009 with six oncologists and three neurosurgeons, compensating them based on referrals instead of productivity in violation of the Stark Law. The restriction is in place to prevent doctors from referring patients for monetary rather than medical reasons, and the U.S. Department of Justice has decided to intervene on those aspects of the case.Baklid-Kunz also is alleging improper hospital admissions, unnecessary back procedures and other billing irregularities — allegations the Justice Department has not intervened on but her lawyers are pursuing. Hospital officials say their contracts were legal, and they deny all of Baklid-Kunz's allegations. Halifax Health has six law firms working on the case, including McDermott Will & Emery, which the U.S. News and World Report ranked a tier-one firm in the area of health care law. Also serving as lead counsel is Carlton Fields, another big law firm that has received top-tier status in the magazine's rankings in several categories. Carlton Fields has enlisted the support of Hill & Knowlton, a global public relations firm, Guthrie said. The hospital hired Lester Kaney, a local attorney, to serve as special counsel for the Halifax Health Board of Commissioners, and surgeons involved in the case have hired lawyers at the hospital's expense at well. Big bucks are on the line for Baklid-Kunz, who still works at the hospital as director of physician services, and her attorneys. In addition to Wood, a trial lawyer, the Atlanta-based firm Wilbanks & Bridges LLP is serving as lead counsel. She's also enlisted the help of Withrow, McQuade & Olsen LLP, another Atlanta firm that specializes in health care law. Under the False Claims Act, Baklid-Kunz is eligible to receive 15 percent to 25 percent of money recouped by the federal government. In this case, the U.S. Department of Justice, which intervened in 2011, has calculated the damages at $725 million to $1.14 billion, a potential payoff of up to $285 million for the whistle-blower and her attorneys. In false claims cases, attorneys are betting they will be successful. Marlan Wilbanks, an attorney for Baklid-Kunz, estimated he takes one out of every 25 cases that are presented to him. Lawyers generally receive 40 percent of the whistle-blower's payout, and the defendants reimburse them for legal fees if the suit is successful, he said. “You can't just take every (case) that comes in or you would quickly go out of business,” Wilbanks said. “(If we lose), we are out of millions of dollars of time and hundreds of thousands of dollars of expense. You are taking a huge risk with your time and your money.” Wilbanks has scored some substantial victories. Most recently, he helped broker a $26 million settlement with Shands HealthCare in a suit accusing the hospital of admitting patients who didn't need to be hospitalized. In that case, Shands officials opted to settle rather than go through costly litigation, and they denied liability.Wilbanks said he recruited Wood to join the case when he became convinced the matter was going to trial. “I don't think there is anybody who's better at communicating and connecting with people,” Wilbanks said. “He's ethical, he's aggressive and he's totally fearless. He's not going to be bullied by some big law firm.” Halifax Health isn't intimidated because the facts are on its side, Guthrie said. “I don't think it's going to change what happened or how our attorneys will handle it,” he said. “It's a very complex Stark Law they are going to be explaining and at the end of the day convincing the jury and judge that this is not Medicare fraud.” Wood, though, said he believes his client is telling the truth. Barring a settlement, a jury is expected to decide in March.

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